Apple Meets Dr. Dre: What's in the $3.2B Beats Deal

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May 9 (Bloomberg) -- Bloomberg’s Hans Nichols and Rob LaFranco examine Apple’s pending purchase of Beats Electronics in a $3.2 billion deal, what it brings to Apple’s music services and the big billion dollar payday for Beats founder Dr. Dre. They speak with Anna Edwards on Bloomberg Television’s “The Pulse.”

A $3.2 billion sale.

Why apple ceo tim cook could be making the company's biggest acquisition?

Why does this make sense?

There was a lot of cash that apple has.

At the core, there is a lot of corporate cash that wants to be put to use.

Apple gets hardware from beats.

They sell these headphones.

You can ask jonathan ferro on which model he has later.

It is a hardware company.

Apple is going to get into wearables.

Our glasses will soon have wearables.

The years is someplace -- ears is someplace where you can have wearables that has not quite been dominated.

The number of downloads for apple are down.

You are seeing declining growth.

People are streaming more.

This is a chance for apple to get a streaming business and to get more hardware.

It looks like they're going to get $3.2 billion.

If this all goes through, it could make dr.

Dre the first rap billionaire.

If phenomenal success story.

It is.

In the rap business, especially, there has been a steady progression toward ownership.

They rap about billions all the time.

This industry was a bootleg type of industry when it started.

It was entrepreneurial.

They were selling cassettes out of the backs of cars.

The record industry wanted nothing to do with it.

Owning their masters was a big thing, creating record labels.

The wealthiest ones make more of their money out of things not making the music.

Such as dr.

Dre with his company.

Without a doubt.

In the past, the way to make wealth in music business was through music publishing.

That was supplanted by these guys who do not really write their own songs.

They never really stopped publishing is a way of making the money.

Owning the masters was another way.

That was the record label business.

Bill created their own record labels.

-- and they all created their own record labels.

Then they got into the vodka business, closing business, headphone business.

A brilliant move.

I'm still debating whether i can wear those headphones over the top of my hair.

The company has tried to get into streaming.

They had itunes radio, itunes match.

They were not the successes they had hoped for.

Maybe tim cook is looking for some outside help in this particular part of the business.

Why does it make sense for apple?

Everything you said has a virtue, a benefit of being absolutely correct.

I have been waiting several months now.

Apple needs to have streaming revenue.

They need to have people involved in the products.

Talking about the earlier story, it strikes me that these are the same piece.

On the con -- omnicon, publicis is a global ad company that can go after silicon valley.

Apple is making sure that all of the content you consume is provided by them.

This is going to be a remarkably busy summer in terms of m&a. we said -- should send matt campbell to see what he can pick up.

He likes a holiday.

We will put it to him.

Let's talk about some of the other entertainment stars or billionaires.

No other raptors -- rappers.

Puff daddy is making good money.

Do entertainers typically feature high on the billionaires list?

Not typically very high.

There are very few of them.

The poster child is oprah winfrey.

George lucas, steven spielberg.

They all relies to early on that someone along the way took the roof off of my brain -- you should not just be looking at a $10 million salary or a big royalty payment.

You need to go into ownership.

Lucas made a great deal in early star wars when nobody wanted it.

It turned him into a billionaire.

Spielberg did the same, oprah did the same.

Obviously, it is happening now.

That mentality has permeated the entertainment industry.

Thank you for joining us.

Hans, thank you to you as well.

This text has been automatically generated. It may not be 100% accurate.

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